A bill that could raise the price of individual state contracts by up to 5 percent has passed the Senate, and its backers are claiming a victory for their jobs agenda.

In fact, the passage of Senate Bill 1 is more of a victory for muddled economic thinking.

We understand, of course, the political appeal of legislation that offers a bidding preference of up to 5 percent for firms that hire at least 90 percent Colorado residents. After all, this state still suffers from unacceptably high unemployment.

But the way to boost the economy is not to increase the cost of government. Nor is it to penalize efficient businesses that offer the lowest bid.

SB 1 sponsor Evie Hudak, D-Westminster, points out that last year “the state spent more than $794 million on contracts with out-of-state companies,” arguing that “we need to use that money to hire Colorado workers before hiring people from other states. … Money paid to Colorado workers supports local businesses and creates even more local jobs.”

But presumably out-of-state companies usually do hire predominantly local workers, either directly or through subcontractors. It would be highly inconvenient and expensive not to. Nor does SB 1 target out-of-state companies anyway, as Hudak herself has been at pains to say. To do so would send a foolish message that the state is not open to business.

No, the bill targets out-of-state workers.

However, one of the strengths of the U.S. economy has always been that companies operate in a national market with minimal barriers to interstate commerce. The last thing states should be doing is creating, in effect, protectionist rules for labor that try to tilt the playing field.

As Sen. Shawn Mitchell, R-Broomfield, said in opposing the measure, “This is not a jobs-growing bill. This is a chisel-our-neighbors bill.”

The bill’s full 5 percent bidding advantage actually has three components. Hiring 90 percent Colorado workers counts for a 3 percent preference, with the additional 2 percent being available only to companies that offer health care and retirement benefits to workers and a “qualified apprenticeship training program.”

Some Republicans have charged that the apprenticeship provision offers a break to unionized firms. Maybe so, but it has the same problem as the other provisions: It needlessly hikes costs.

The text of the bill confirms this. It states that “if the requirements … result in increased costs for building higher education facilities, such costs shall not be passed on to students….”

Why add such language if it weren’t likely that costs will climb?

We haven’t even mentioned the difficulties this bill will create for companies near Colorado borders.

We also can’t fail to see irony in the fact that lawmakers across the spectrum have been saying that the state’s personnel rules, embedded in the constitution, impose residency rules that keep government managers from recruiting the best candidates.

SB 1 is a well-meaning measure that is badly misguided. We hope the House stops it from becoming law.

Just months ago, Republicans got away with a massive upward redistribution of wealth, raiding $1.5 trillion from the Treasury and sticking future generations with the bill. Now, they're going for more.